Student loan consolidation is the process of combining multiple federal student loans into a single loan with a single monthly payment. Consolidation can simplify loan repayment, lower monthly payments, and provide access to alternative repayment plans.
Here are some key facts about student loan consolidation:
Consolidation is available for federal student loans: Private student loans cannot be consolidated with federal student loans.
Consolidation is free: There are no fees associated with consolidating federal student loans.
You can consolidate while in school: If you have multiple federal student loans and are still in school, you can consolidate your loans while you are still in school.
Your interest rate may change: When you consolidate your loans, your interest rate may change based on the weighted average of the interest rates on the loans you are consolidating.
You can choose a repayment plan: Consolidation allows you to choose a repayment plan that works for you, including income-driven repayment plans that base your monthly payment on your income.
You can’t consolidate private student loans: Private student loans cannot be consolidated with federal student loans. If you have private student loans, you may be able to refinance them with a private lender.
Consolidation can extend your repayment term: Consolidating your loans may extend your repayment term, which can lower your monthly payments but increase the total amount of interest you pay over the life of the loan.
If you are struggling to manage multiple federal student loans, consolidation may be a good option for you. It can simplify loan repayment, lower your monthly payments, and provide access to alternative repayment plans. However, it is important to carefully consider the pros and cons of consolidation before making a decision.